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The Challenge To Create More Value in All Negotiations

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					Business Excellence in a Disruptive Age
MLIM National GPC Sales Meeting Key Biscayne/0405.2006/LONG

Re-Imagine2006!

Tom Peters’

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Slides* at …

tompeters.com
*Also, “Long”

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For Ray.
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Unglued.
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THREE BILLION NEW CAPITALISTS
—Clyde Prestowitz
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New Economy?

Sergey, Larry > Harvard
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New Economy?!

Genentech09, Amgen09 > Merck09
(70K-3/394B-5)
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Goodnight and Good Luck.
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is America’s God-given right anymore.”
—Carly Fiorina/HP/January2004
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“There is no job that

“Deutsche Bank Moves Half of Its Back-office Jobs to India”/ headline/FT/0327; 500

of 900 Research;

JPMorgan Chase—30% backoffice by 12.31.07

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―This is a dangerous world and it is going to become more dangerous.‖

―We may not be interested in chaos but chaos is interested in us.‖
Source: Robert Cooper, The Breaking of Nations: Order and Chaos in the Twenty-first Century
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1

Unparalled in “Our” Professional Lifetime*

Terrorism Middle East instability H5N1 China screwups
Globalization backlash Energy dependence Environmental threats Life sciences “Cold War” with China Fraying American fabric U.S. impotence in the face of Asia‟s rise
*Current leaders were not Cold War leaders 1

The General, and Darwin …
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―If you don‘t like change, you‘re going to like irrelevance even less.‖

—General Eric Shinseki, Chief of Staff. U. S. Army

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―It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.‖ —Charles Darwin
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… and Me.
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better to try a swan dive and deliver a colossal belly flop than to step timidly off the board while holding your nose.‖ —Fast Company /October2003
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―In Tom‘s world, it‘s always

Point of View!/Point of Dramatic Difference!
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ExIn*: 1982-2002/Forbes.com

DJIA: $10,000 yields $85,000 EI: $10,000 yields $140,050

*Excellence Index/basket of 32 publicly traded stocks

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Naked Emperors.
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“Forbes100” from 1917 to 1987: 39 members of the Class of ‟17 were alive in ‟87; 18 in ‟87 F100; 18 F100 “survivors” underperformed the market by 20%; just 2 (2%), GE & Kodak, outperformed the market 1917 to 1987.
S&P 500 from 1957 to 1997: 74 members of the Class of ‟57 were alive in ‟97; 12 (2.4%) of 500 outperformed the market from 1957 to 1997. Source: Dick Foster & Sarah Kaplan, Creative Destruction: Why Companies That Are Built to Last Underperform the Market

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―I am often asked by would-be entrepreneurs seeking escape from life within huge corporate structures, ‗How do I build a small firm for

myself?‘ The answer seems obvious:

Buy a very large one and just wait.‖
—Paul Ormerod, Why Most Things Fail: Evolution, Extinction and Economics
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“When asked to name just one big merger that had lived up to expectations, Leon Cooperman, former cochairman of Goldman Sachs‟ Investment Policy

I‘m sure there are success stories out there, but at this moment I draw a blank.‖
Committee, answered:
—Mark Sirower, The Synergy Trap

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1

―I don‘t believe in economies of scale.

You don‘t get better by being bigger. You get worse.‖
—Dick Kovacevich/Wells

Fargo/Forbes/08.04 (ROA: Wells, 1.7%; Citi, 1.5%; BofA, 1.3%; J.P. Morgan Chase, 0.9%)
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“TOO BIG TO GROW: Why Wall
Street has soured on many of corporate America‟s most admired and feared companies”
—headline, Newsweek, 0313.06
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Spinoffs perform
better than IPOs … track record, profits … “freed from the confines of the parent … more entrepreneurial, more nimble” —Jerry Knight/Washington Post/08.05
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Innovate
or

Die!!

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Only the constant pursuit of innovation can ensure long-term success.‖
render them obsolete.
—Daniel Muzyka, Dean, Sauder School of Business, Univ of British Columbia (FT/09.17.04)
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“A focus on cost-cutting and efficiency has helped many organizations weather the downturn, but this approach will ultimately

Different!*
*“Dramatic Difference” (DH), “Remarkable Point of view” (SG)
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Franchise Lost!

TP:

“How many of you
a new Chevy?”
NYC/IIR/061205

[600]

really

crave
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This is not a ―mature category.‖
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This is an

“undistinguished
category.”
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$415/SqFt/Wal*Mart $798/SqFt/Whole Foods

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7X. 730A800P. F12A.*
*’93-’03/10 yr annual return: CB: 29%; WM: 17%; HD: 16%. Mkt Cap: 48% p.a.
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Experience: “Rebel Lifestyle!”

―What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.‖
Harley exec, quoted in Results-Based Leadership
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—W. Chan Kim & Renée Mauborgne, “Think for Yourself —Stop Copying a Rival,” Financial Times/2003

“To grow, companies need to break out of a vicious cycle of competitive benchmarking and imitation.‖

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Cirque du Soleil!
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―Every time we come to a comfort zone, we will find a way out.‖ ―No Cloning.‖ ―‗Reinvent the brand‘ with each new show.‖ ―A typical day at the office for me begins by asking, ‗What is impossible that I am going to do today?‘‖ —Daniel Lamarre, president,
Cirque du Soleil

SET THE AGENDA.* (Period.)
Great Companies …
* “disturb the sleep of …
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AGENDA SETTERS: “Set the Table”/ Pioneers/ Questors/ Adventurers

US Steel … Ford … Toyota … Sears … GM … ITT … The Gap … Limited … Wal*Mart … Tesco … P&G … 3M … Intel … IBM … Apple … Nokia … Cisco … Dell … MCI … Sun … Microsoft … Google … Enron … Schwab … GE … Laker … Southwest … People Express … Ogilvy … Virgin … eBay … Amazon … Sony … Amgen … BMW … CNN … Nike
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Focus!
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―We will not, I repeat not, pretend to be ‗all things to all people.‘‖
—CEO, Investec (03.06)
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The Benefits of … “FOCUSED EXCELLENCE”

Shouldice/Hernia Repair:
30 min,

1% recurrence. Avg: 90 min, 10%15% recurrence.
Source: Complications, Atul Gawande
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BOLD
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of making Small Changes to Small Things. Rather, make Big Changes to

―Beware of the tyranny

Big Things.‖

—Roger Enrico, former Chairman, PepsiCo
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Line Extensions:

86 percent of new products. 62 percent
39
of revenues. percent of profit.
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Source: Blue Ocean Strategy, Chan Kim and Renee Mauborgne

Action
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―Execution is the job of the business leader.‖
Execution: The Discipline of Getting Things Done

—Larry Bossidy & Ram Charan/

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discussing hows and whats, tenaciously following through, and ensuring accountability.‖
—Larry Bossidy & Ram Charan/ Execution: The Discipline of Getting Things Done
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systematic process

―Execution is a

of rigorously

Personal!
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Buy a Mirror!
Step #1:
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―The First step in a ‗dramatic‘ ‗organizational change program‘ is obvious—dramatic personal change!‖ —RG
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Summary:

WallopWal*Mart16*
*Or: Why it‟s so unbelievably easy to beat a GIANT Company
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The “Small Guys” Guide: Wallop Wal*Mart16

*Niche-aimed. (Never, ever “all things for all people,” a “miniWal*Mart.) *Never attack the monsters head niche business and lukewarm customers.)

on! (Instead steal

*“Dramatically
*Compete

Different”

(La Difference ... within our community, our industry regionally, etc … is as obvious as the end of one‟s nose!) (THIS IS WHERE MOST MIDGETS COME UP SHORT.)

on value/experience/intimacy, not
Vendors. (BEAT THE
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price. (You ain‟t gonna beat the behemoths on cost-price in 9.99
out of 10 cases.) *Emotional bond with Clients, BIGGIES ON EMOTION/CONNECTION!!)

“You do not merely want to be

You want to be considered the only ones who do what you do.”
the best of the best.
—Jerry Garcia

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Up,

Up,

Up,

Up
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the Value-added Ladder.

Solve It.
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And the “M” Stands for … ?

“Systems Integrator of choice.”/BW
Gerstner‟s IBM:

(“Lou, help us turn ‘all this’ into that long-promised ‘revolution.’ ” )

IBM Global Services*

Services Corp.):

$55B
(*Integrated Systems

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Planetary Rainmaker-in-Chief!

“Palmisano’s strategy is to expand tech’s borders by pushing users—and entire industries—toward radically different business models. The payoff for IBM
would be access to an ocean of revenue—Palmisano estimates it at $500 billion a year—that technology
companies have never been able to touch.” —Fortune
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“Big Brown‟s New Bag: UPS Aims to Be the

Traffic Manager for Corporate America”
—Headline/BW/2004
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And …

MasterCard Advisors
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The Value-added Ladder/Stuff „n‟ Things

Goods Raw Materials
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The Value-added Ladder/Stuff & Transactions

Services
Goods Raw Materials
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The Value-added Ladder/Opportunity-seeking

Gamechanging Solutions/ Business Advantage
Services Goods Raw Materials
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The ―PSF35‖:
Thirty-Five Professional Service Firm Marks of Excellence
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The PSF35: The Work & The Legacy
(Every Practice Group: “If you can‟t explain your position in eight words or less, you don‟t have a position”—Seth Godin) 2. DRAMATIC DIFFERENCE (“We are the only ones who do what we do”—Jerry Garcia) 3. Stretch Is Routine (“Never bite off less than you can chew”—anon.) 4. Eye-Appetite for Game-changer Projects (Excellence at Assembling “Best Team”—Fast) 5. “Playful” Clients (Adventurous folks who unfailingly Aim to Change the World) 6. Small “Uneconomic” Clients with Big Aims 7. Life Is Too Short to Work with Jerks (Fire lousy clients) 8. OBSESSED WITH LEGACY (Practice Group and Individual: “Dent the Universe”—Steve Jobs) 9. Fire-on-the-spot Anyone Who Says, “Law/Architecture/Consulting/ I-banking/ Accounting/PR/Etc. has become a „commodity‟ ” 10. Consistent with #9 above … DO NOT SHY AWAY FROM THE 1.

CRYSTAL CLEAR POINT OF VIEW

WORD (IDEA) “RADICAL”
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?????

Do good (excellent?!) work Make a lot of money
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Point of View!
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―This is the true joy of Life, the being used for a purpose recognized by yourself as a mighty one … the being a force of Nature instead of a feverish, selfish little clod of ailments and grievances complaining that the world will not devote itself to making you happy.‖ —GB Shaw/
Man and Superman
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―To have a firm persuasion in our work—to feel that what we do is right for ourselves and good for the world at exactly the same time—is one of the great triumphs of human existence.‖ —David Whyte, Crossing the
Unknown Sea: Work as a Pilgrimage of Identity
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―All of our artistic and religious traditions take equally great pains to inform us that we must never mistake a good career for good work. Life is a creative, intimate, unpredictable conversation if it is nothing else—and our life and our work are both the result of the way we hold that passionate conversation.‖ —David Whyte,
Crossing the Unknown Sea: Work as a Pilgrimage of Identity

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―To Be somebody or to Do something‖
BOYD: The Fighter Pilot Who Changed the Art of War (Robert Coram)
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you plan to do with your one wild and precious life?‖
—Mary Oliver
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―Tell me, what is it

always showtime.‖
—David D‟Alessandro, Career Warfare
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“It‘s

Up,

Up,

Up,

Up
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the Value-added Ladder.

Tom Peters

The Irreducible209/ Sales122
MLIM/Key Biscayne04.05.2006

Up,

Up,

Up,

Up
1

the Value-added Ladder.

Experience it.
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―Experiences are as distinct from services as services are from goods.‖
—Joe Pine & Jim Gilmore, The Experience Economy: Work Is Theatre & Every Business a Stage
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is more than just a „resort‟; it‟s a means of rediscovering oneself, of inventing an entirely new „me.‟ ”
Source: Jean-Marie Dru, Disruption
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―Club Med

“The [Starbucks] Fix” Is on …

―We have identified a ‗third place.‘ And I really believe that
sets us apart. The third place is that place that’s not work or home. It’s the place our customers come for refuge.”
Nancy Orsolini, District Manager
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The Value-added Ladder/Memorable Connection

Spellbinding Experiences
Gamechanging Solutions Services Goods Raw Materials
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Up,

Up,

Up,

Up
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the Value-added Ladder.

Dream it.
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moment in the life of a client. Important experiences that tempt the client to commit substantial resources. The essence of the desires of the consumer. The opportunity to help clients become what they want to be.‖
—Gian Luigi Longinotti-Buitoni
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DREAM: ―A dream is a complete

The Value-added Ladder/Emotion

Dreams Come True
Spellbinding Experiences Gamechanging Solutions Services Goods Raw Materials
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experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.‖
— from the Ritz-Carlton Credo
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“The Ritz-Carlton

Excellence:

Up,

Up,

Up,

Up
1

the Value-added Ladder.

Love it

!
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have run out of juice. They‘re dead.‖

―Brands

—Kevin Roberts/Saatchi & Saatchi

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Kevin Roberts:

Lovemarks!
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97

98

99

100

Tattoo Brand: What %
of users would tattoo the brand name on their body?

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Top 10 “Tattoo Brands”* Harley .… 18.9% Disney .... 14.8 Coke …. 7.7 Google .... 6.6 Pepsi .... 6.1 Rolex …. 5.6 Nike …. 4.6 Adidas …. 3.1 Absolut …. 2.6 Nintendo …. 1.5
*BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom

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Top 10 “Tattoo Brands”* Harley .… 18.9% Disney .... 14.8 Coke …. 7.7 Google .... 6.6 Pepsi .... 6.1 Rolex …. 5.6 Your name here … ?? Nike …. 4.6 Adidas …. 3.1 Absolut …. 2.6 Nintendo …. 1.5
*BRANDsense: Build Powerful Brands through Touch, Taste, Smell, Sight, and Sound, Martin Lindstrom
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Up,

Up,

Up,

Up
1

the Value-added Ladder.

Lovemark
Dreams Come True Spellbinding Experiences Gamechanging Solutions
Services Goods Raw Materials
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Sell It.
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―Women are the majority market‖
—Fara Warner/The Power of the Purse
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????????? Home Furnishings … 94% Vacations … 92% (Adventure Travel … 70%/ $55B travel equipment) Houses … 91% D.I.Y. (major “home projects”) … 80% Consumer Electronics … 51% (66% home computers) Cars … 68% (90%) All consumer purchases … 83% Bank Account … 89% Household investment decisions … 67% Small business loans/biz starts … 70% Health Care … 80%
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1970-1998
Men‟s median income: +0.6% Women‟s median income:

+ 63%

Source: Martha Barletta, Marketing to Women

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Commercial Purchasing Power Purchasing mgrs. & agents: 51% HR: >>50% Admin officers: >50%

Source: Martha Barletta, Marketing to Women
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The Perfect Answer
Jill and Jack buy slacks in black…

Read This Book …

The Eight Truths of Marketing to Women
Faith Popcorn & Lys Marigold
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EVEolution:

EVEolution: Truth No. 1

Connecting Your Female Consumers to Each Other Connects Them to Your Brand
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They join them.‖
brands.
EVEolution
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―Women don‘t buy

2.6

vs.
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Editorial/Men: Tables, rankings.* Editorial/Women:

Narratives that cohere.*
*Redwood (UK)
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Initiate Purchase

Men: Study “facts & features.” Women: Ask lots of people for input.
Source: Martha Barletta, Marketing to Women
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1. Men and women are different. 2. Very different. 3. VERY, VERY DIFFERENT. 4. Women & Men have a-b-s-o-l-u-t-e-l-y nothing in common. 5. Women buy lotsa stuff. 6. WOMEN BUY A-L-L THE STUFF. 7. Women‟s Market = Opportunity No. 1. 8. Men are (STILL) in charge. 9. MEN ARE … TOTALLY, HOPELESSLY CLUELESS ABOUT WOMEN. 10. Women‟s Market = Opportunity No. 1.
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10. Women’s Market = Opportunity No. 1.
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Why?
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Good Thinking, Guys!
“Kodak Sharpens Digital Focus
On Its Best Customers:

Women‖
—Page 1 Headline/WSJ/0705
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Duh!

“More Hotels Try to Offer What Women Want”
—Headline, USA Today, 11.08.05
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“Women come out better on almost every count as investors … They are less likely to
hold a losing investment too long, and less likely to wait too long to sell a winner; they‟re also less likely to put too much money into a single investment or to buy a reputedly hot stock without doing sufficient research.”
— “When It Comes to Investing, Gender A Strong Influence on Behavior.”/Atlantic
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Women poker players: More cautious. More patient. More disciplined. Bluff with more attention to the odds. More notes [on-line]. Learn more and improve faster. Less emotional, less ego. Know more about men than men do about them; more effective at exploiting men‟s attitudes.
Source: “Ante Up, Ladies: As poker mania grips the nation, more women are mastering the game, applying their own life lessons to poker and the lessons of poker to life,” Time, 11.05
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Sell It.
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2000-2010 Stats

18-44: -1% 55+: +21% (55-64: +47%)
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44-65: “New Customer Majority” *
*45% larger than 18-43; 60% larger by 2010
Source: Ageless Marketing, David Wolfe & Robert Snyder
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“The New Customer Majority is the only adult market with realistic prospects for significant sales growth in dozens of product lines for thousands of companies.”
—David Wolfe & Robert Snyder, Ageless Marketing
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―Baby-boomer Women: The Sweetest of Sweet Spots for Marketers‖
Snyder, Ageless Marketing

—David Wolfe and Robert

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She’s the most powerful consumer in America. And as she starts
“WOMAN of the Year: to turn sixty this month, the affluent baby boomer is doing what she’s always done— redefining herself.”
—Joan Hamilton, Town & Country, JAN06
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Boomers: “We‟re not going gently. We‟re going the way our generation does everything else. Research it. Make sure you‟re getting the best deal. Study the alternatives the way we studied alternative families and alternative diets and alternative religions. „Baby Boomers Want Less Pain And More Grace Before That Good night,‟ reads one headline …”
—James Atlas/My Life in the Middle Ages
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“Sixty Is the New Thirty”
—Cover/AARP/11.03
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Duh.

Women. Boomers-Geezers. Women business owners. Single-adults (Urban)
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Fastest growing demographic:

Single-person Households (>50% in
London, Stockholm, etc)
Source: Richard Scase
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% of homes purchased by single women: 1981, 10%; 2005, 20%

% of homes purchased by single men: 1981, 10%; 2005, 9%
Source: USA Today/02.15.06
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Talent Time.
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Brand = Talent.
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Les Wexner: From

sweaters to …

people!

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Hire very good people!
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“We believe companies can increase their market cap 50 percent in 3 years. Steve Macadam at Georgia-

changed 20 of his 40 box plant managers to put more talented, higher paid managers in charge. He increased profitability from $25 million to $80 million in 2 years.” —Ed Michaels, War for Talent
Pacific
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Our Mission

To develop and manage talent;
to apply that talent, throughout the world, for the benefit of clients; to do so in partnership; to do so with profit.
WPP
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Brand You.
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“One of the defining characteristics [of the change] is that it will be less driven by countries or corporations and more driven by real people. It will
unleash unprecedented creativity, advancement of knowledge, and economic development. But at the same time, it will tend to undermine safety net systems and penalize the unskilled.” —Clyde Prestowitz, Three Billion
New Capitalists
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very special about your work, no matter how hard you
apply yourself you won‘t get noticed, and that increasingly means you won‘t get paid much either.‖ —Michael Goldhaber, Wired

“If there is nothing

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Distinct … or … Extinct
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Women Rule.
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“AS LEADERS, WOMEN RULE:
Title, Special Report/BusinessWeek

New Studies find that

female managers outshine their male counterparts in almost every measure”
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Women‟s Strengths Match New Economy Imperatives: Link [rather than rank]
workers; favor interactive-collaborative leadership style [empowerment beats top-down decision making]; sustain fruitful collaborations; comfortable with sharing information; see redistribution of power as victory, not surrender; favor multi-dimensional feedback; value technical & interpersonal skills, individual & group contributions equally; readily accept ambiguity; honor intuition as well as pure “rationality”; inherently flexible; appreciate cultural diversity. —Judy B. Rosener,
America’s Competitive Secret: Women Managers
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“TAKE THIS QUICK QUIZ: Who manages more things at once? Who puts more effort into their appearance? Who usually takes care of the details? Who finds it easier to meet new people? Who asks more questions in a conversation? Who is a better listener? Who has more interest in communication skills? Who is more inclined to get involved? Who encourages harmony and agreement? Who has better intuition? Who works with a longer „to do‟ list? Who enjoys a recap to the day’s events? Who is better at keeping in touch with others?”
Source: Selling Is a Woman’s Game: 15 Powerful Reasons Why Women Can Outsell Men, Nicki Joy & Susan Kane-Benson
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―To be a leader in consumer products, it‘s critical to have leaders who represent the population we serve.‖
—Steve Reinemund/PepsiCo
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Lead It …Loud.
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Create a Cause!
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―People want to be part of something larger than themselves. They want to be part of something they‘re really proud of, that they‘ll fight for, sacrifice for , trust.‖ —Howard Schultz, Starbucks (IBD/09.05)
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Find ‘em!
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―The leaders of Great Groups love talent and know where to find it. They revel in the talent of others.‖
—Warren Bennis &
Patricia Ward Biederman, Organizing Genius

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Jack didn‘t have a ―vision‖!
“The” Secret:
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Make It a Grand Adventure!
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―The role of the Director is to create a space where the actor or actress can become more than they‘ve ever been before, more than they‘ve dreamed of being.‖ —Robert Altman, Oscar acceptance
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Trumpet an Exhilarating Story!
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Best Story Wins!
―A key – perhaps the key – to leadership is

communication of a story.‖
—Howard Gardner/Leading Minds: An Anatomy of Leadership
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the effective

Live Your Story!
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“You must
Gandhi

the change you wish to see in the world.‖
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be

Demand Action!
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―We have a ‗strategic plan.‘ It‘s called doing things.‖
— Herb Kelleher
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how few oil people really understand that

you only find oil if you drill wells.
You may think you‘re finding it when you‘re drawing maps and studying logs, but you have to drill.‖
Source: The Hunters, by John Masters, Canadian O & G wildcatter
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―This is so simple it sounds stupid, but it is amazing

Try It!
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Sam’s Secret

#1!
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Cut the Crap!
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―GE has set a standard of candor. … There is no puffery. … There isn‘t an ounce of denial in the place.‖ —Kevin Sharer, CEO Amgen,
on the “GE mystique” (Fortune)

Dispense Enthusiasm!
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―Nothing is so contagious as enthusiasm.‖
—Samuel Taylor Coleridge
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―A man without a smiling face must not open a shop.‖
*Courtesy Tom Morris, The Art of Achievement

—Chinese Proverb*

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Avoid … Moderation!
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Kevin Roberts‟ Credo

1. Ready. Fire! Aim.

2. If it ain‘t broke ... Break it! 3. Hire crazies. 4. Ask dumb questions. 5. Pursue failure. 6. Lead, follow ... or get out of the way! 7. Spread confusion. 8. Ditch your office. 9. Read odd stuff.

10. Avoid moderation!
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No Less Than Excellence. Ever.
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Gaspworthy!
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